The Allais Paradox illustrates how human decisions often deviate from expected utility theory, sparking alternative models in behavioral economics and decision theory.
A comprehensive exploration of Expected Utility, a crucial concept in economics and decision theory used to evaluate the utility derived from various risky prospects.
A comprehensive exploration of Expected Utility Theory, a fundamental concept in economics, finance, and decision theory, modeling decision-making under uncertainty by considering the expected outcomes of different choices.
An in-depth look into the Framing Effect, exploring how the presentation of choices can influence decision-making behaviors. Includes examples, types, historical context, and related terms.
A comprehensive overview of Majority Voting, a decision-making method that selects the option with the majority of votes, including historical context, key events, types, mathematical models, and its importance in various fields.
In decision theory, minimax regret is a rule for selecting a course of action under uncertainty that minimizes the maximal amount of opportunity loss, or regret, for every possible course of action across different states of nature or different realizations of uncertainty.
A comprehensive exploration of the concept of Rational Ignorance, which involves choosing not to acquire information when the cost exceeds the expected benefits.
Regret Theory is a framework in decision-making where individuals anticipate the regret they might feel if a wrong choice is made and incorporate this anticipation into their decision processes. This theory offers an alternative to the expected utility hypothesis and helps explain various economic anomalies.
An in-depth exploration of the concept of satisficing, its historical context, applications, and significance in decision-making.
The St. Petersburg Paradox highlights the discrepancy between the theoretical expected value of a game and the amount individuals are willing to pay to play, despite an infinite expected payoff.
The minimax principle is a decision criterion aimed at minimizing the worst-case scenario, thus reducing possible regret by ensuring the most unfavorable outcome is as favorable as possible. It finds extensive applications in decision theory, game theory, and economics.
A trade-off involves making a compromise between two desirable but incompatible features, giving up one benefit in favor of another.
